Making Your Business Grow: Key Pointers to Keep in Mind Prior to Getting SME Funding
Once you have successfully gotten your venture off the ground, your next hurdle would be to secure financial funding to fuel its growth.
Regardless if it’s funding to expand your venture or to purchase a new asset, there’s no denying you’ll need additional funding at one point or another.
Fortunately, this is where an SME loan can come in handy.
However, applying for an SME loan can be daunting.
This is especially for first timers who are still trying to find their way around business loans.
Fortunately, applying for an SME loan is not as complex as it seems.
The following helpful tips should help get you off to a superb start:
Do your research. Before choosing an SME loan provider, it would be ideal to do your research first.
Start by reading online reviews of prospective lenders you consider borrowing from.
It is recommended that you also check if the financial institution you are considering has a good reputation.
When available, go through their website so you will know all the basics about the services they are offering and their terms and conditions.
Doing your research will also make it way easier for you to compare offerings and decide on the SME loan provider that can cater best to your needs.
Keep your debt load manageable: In essence, your debt load is the amount of debt that is reflected in your balance sheet.
To significantly boost your chances of getting approval, you have to show potential lenders you will be able to settle your obligations on top of the current debt you already have.
For starters, get on your prospective creditor’s side by demonstrating how you will use the loan and how you can benefit from it.
You can impress them further by giving them a forecast of likely revenues you will gain from the cash infusion.
Prove to creditors you have a steady cash flow: For many lenders, cash is still considered one of the primary indicators of the venture’s health and future prospects.
Given that you are able to show creditors your business has consistent and ample source of cash flow, you’d also be reassuring them of your capability to repay your dues within the agreed terms.
Be ready to provide bank and financial statements, tax returns, and other financial documents whenever needed.
Demonstrate and show exceptional business insight: Undoubtedly, it will be so much easier convincing a creditor to lend you money if you show superb business insight when it comes to running your business.
Part of exceptional business insight should include your ability to anticipate likely challenges and having a plan in place to address them.
Make sure you have a favourable payment history: Yet another aspect many creditors take into account is the payment history.
Obviously, they’d want to know if you are good at paying your obligations on time.
In line with this, it is recommended that you also ensure all the figures are accurate when you will be asked to present a credit report.
If the report does not indicate relevant trade partners or other lenders who can give a good reference, you can provide those to the lender yourself to boost your chances of getting the nod.
Securing an SME loan can be easy given you know how.
Provided that you are able to prove your capacity to pay, you do the needed legwork, and you have all the needed documents handy, you are already a step closer to securing that financial assistance you need to steer your business in the right direction.
Related ArticlesRead more from Loan
Multimag CommentsWe love comments
Only registered users can comment.